3rd Circuit upholds longest insider-trading sentence

In June 2012, Kluger—an ex-corporate lawyer at Cravath, Skadden, Fried Frank and Wilson Sonsini—was sentenced to a record-breaking 12 years in jail for a $37 million insider-trading scheme that lasted 17 years. Kluger, who is 52, had pleaded guilty in 2011 to gathering secrets about pending mergers and acquisitions concerning big companies such as Oracle Corp., Sun Microsystems Inc., 3Com Corp. and Acxiom Corp.

Yesterday, the 3rd Circuit upheld Kluger’s sentence. The court found that there was “good reason” to impose the long prison term on Kluger because, as a lawyer, he took an oath to uphold the law.

“Moreover, it is really quite remarkable that Kluger could not even wait to graduate from law school before using his employment at a law firm to initiate his illegal activities and it is equally remarkable that during most of his legal career he was involved in criminal activity, so that in an actual though perhaps not in a legal technical sense as the term is used in the sentencing guidelines, he truly was a career criminal,” U.S. Circuit Judge Morton Greenberg wrote for the court in a 48-page opinion.

Kluger’s lawyer told the Wall Street Journal that he wasn’t sure if his client would pursue additional legal remedies for his “particularly and unnecessarily harsh” sentence.